Swedbank's troubles in the Baltics far from over as more borrowers face difficulties repaying loans.

Sweden’s fourth-largest bank Swedbank, the largest lender in the trouble-hit Baltics, may be facing an increasing number of bad loans as more people are unable to repay their loans.

"What concerns problem housing loans, we estimate that about 3,000 borrowers have long-term payment problems. We expect this figure to grow," said Mart Siilivask, press spokesperson of Swedbank in Estonia, in an interview to Delfi, Baltic Business News reports.

Mart Siilivask didn’t say how many private borrowers that in the last six months have developed problems in making mortgage repayments or paying for leasing. Last year Swedbank forwarded some 400 mortgage claims to court bailiffs for enforcement.

Soaring loan losses are expected in all three Baltic states, which are suffering from the worst recessions in the European Union.  

Swedbank's chief executive officer Michael Wolf recently said that the bank stands ready for more trouble in the Baltics, especially in Latvia. It's also capitalized for a devaluation of the Latvian currency.

“With the information and knowledge we have today, we are well capitalized,” Michael Wolf said in an interview with Bloomberg. “The central bank of Sweden and the Financial Supervisory Authority recently came out and confirmed that view with their stress tests.”

Last week Swedbank's criticized chairman Carl Eric Stålberg was removed as the bank's nomination committee proposed Lars Idermark as new Chair of the Board.

Swedbank, the largest lender in the Baltics, posted a a third-quarter loss of 3.34 billion kronor ($482 million) compared with a profit of 2.47 billion kronor a year ago. That was the bank's third consecutive quarterly net loss and considerably worse than expected by analysts.

Despite the gloom Mart Siilivask said large improvement awaits the Estonian economy as foreign investments and employments start to pick up.

"The adoption of the euro will definitely have a positive impact since it would restore confidence in Estonia and bring more foreign investments and could ease the unemployment situation," Mart Siilivask said.

Swedbank estimates the Estonia’s economy to grow 1.5 percent this year and 4.5 percent in 2011, according to Bloomberg.